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South African Corn Futures Extend Streaks on Drought Concern

Oct. 24 (Bloomberg) -- Corn futures traded in South Africa extended streaks of advances on concern rain is too light to relieve a drought in North West province, one of the nation’s main growing regions for the grain.

Yellow corn for delivery in December rose 1.5 percent to 2,254 rand ($231) a metric ton by the close on the South African Futures Exchange in Johannesburg. That was the ninth straight advance, the longest run since June 2008, and the highest settlement since July 12 for a most-active contract, according to data compiled by Bloomberg.

North West province, where a drought was declared last month, grew about 16 percent of South Africa’s corn in the seven months through September, according to data on the website of the South African Grain Information Service. The government’s Crop Estimates Committee will announce intended summer grain plantings today at 3:30 p.m. local time.

“There is concern of what the committee will reveal, especially since the North West province has been declared drought-stricken,” Benjamin Swanepoel, a trader at Trademar Futures (Pty) Ltd., said by phone from Johannesburg. “The rain they have been receiving is not widespread enough.”

White corn for delivery in December increased 0.4 percent to 2,400 rand a ton. That was a seventh gain in a row and the highest close since Aug. 27 for a most-active contract.

No rain was predicted today for the town of Lichtenburg in North West province, according to the South African Weather Service’s website. Farmers will probably plant corn on 2.75 million hectares (6.8 million acres) this season, according to the median estimate of five traders in a Bloomberg survey.

South Africa is the continent’s biggest corn producer. A meal made from the white variety is a staple food in the nation and yellow corn is mostly fed to animals.

Wheat for delivery in December fell 0.1 percent to 3,495 rand a ton.

To contact the reporter on this story: Tshepiso Mokhema in Johannesburg at tmokhema@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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